**.
NABIULLINA ON THE DECISION TO HOLD RATES "At today's meeting, the board considered two options: raising the key rate and keeping the key rate at its current level." "The discussion (on raising rates) is not fading, we considered this option at the meeting. Was there less support for this option at this meeting? It was probably the same."
"The fact that annual inflation is declining is not in itself grounds for a rate cut. Our monetary policy operates with a lag and is aimed at the future, focused on future inflation, including inflation expectations of citizens, businesses and investors. Annual inflation rates reflect the past. We had very low inflation in the second half of the last year, but from the fourth quarter it has been accelerating and monthly rates have smoothed at the level of 4% (on an annual basis). Therefore, in order to achieve the 4% target next year, we do not see a reason to lower rates."
NABIULLINA ON THE ROUBLE "The weakening of the rouble is already having an effect on inflation ... we believe its effect will be stretched out over time and is now restrained by the fact that many companies built up reserves earlier and did so at a stronger rate."
ZABOTKIN ON THE ROUBLE "There is a decrease in the value of exports and at the same time a fairly rapid recovery in imports, both of which were observed at the end of last year and in the first quarter. Such a weakening of the current account has led to a weakening of the exchange rate. The current exchange rate range is approximately the same as that in which it has fluctuated in recent years."
ZABOTKIN ON SANCTIONS, ADAPTATION OF ECONOMY AND INFLATION "I want to underline that the decrease in the inflation forecast by 0.5 percentage points is largely due to, and reflects, a more successful adjustment of the economy, the adaptation of the economy, first of all, in terms of the availability of imports. Therefore, the pro-inflationary impacts of restrictions on the supply side, which were associated with last year's sanctions, are being resolved more successfully than we expected, and accordingly, this year the inflation that is associated with this will be less."
NABIULLINA ON THE POSSIBILITY OF TAKING FOREIGN BANKING ASSETS IN RUSSIA UNDER GOVERNMENT CONTROL: "Such decisions should be made with very good reasons, connected to the stable functioning of the Russian economy. In the banking sector, we do not consider it to be appropriate."
NABIULLINA ON LIMITING PAYMENTS MADE TO FOREIGN COMPANIES SELLING RUSSIAN ASSETS "We support the establishment of such limits. I think the government commission will announce specific parameters. We believe setting such limits will help reduce volatility, because such transactions - if they are large-scale - can create short-term volatility in the foreign exchange market. But we are not talking about influencing the exchange rate through this. The exchange rate remains floating." "When the government commission made a decision on the authorisation of a transaction (previously), and then accordingly on the transfer of funds, it was carried out without a defined schedule and without specified limits. This sometimes led to fluctuations in the foreign exchange market, and we therefore support the establishment of such limits and schedules."
ZABOTKIN ON CAPITAL OUTFLOW "Last year ... the reduction in capital, both in terms of direct investments and portfolio investments, amounted to around $35 billion. This is not the exit of foreign companies, but a broader category of investments."
NABIULLINA ON THE GOVERNMENT'S BUDGET DEFICIT "Budget policy is something we pay attention to. We proceed from budget plans that the government has outlined, but if the structural budget deficit widens, it will be one of the grounds for tightening monetary policy. But we have to look at the whole set of factors, there may be disinflationary factors that will compensate for pro-inflationary influences."
NABIULLINA ON INFLATION OUTLOOK "Inflation is slightly below our February forecast, while GDP dynamics are higher. This year we expect the economic recovery to continue, which may be accompanied by an intensification of inflationary pressure. This will, to a large extent, depend on demand-side factors. If we see such signs of an acceleration in inflation that will threaten achieving 4% inflation in 2024, then we may need to raise the key rate at future meetings." "There are pro-inflationary factors, we expect some acceleration, an increase in core inflation, but we do not expect double-digit figures."
NABIULLINA ON IMPACT OF WINDFALL TAX ON BANKS
**"The central bank has analysed it for each bank that
could potentially fall under the contribution. There is no big
impact on financial indicators and no impact on financial
stability. I will not say the total figure now ... but we
proceed from the fact that it is not taken from profit that is
formed from the use of regulatory easing."
(Reporting by Reuters)
